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Does wealth inequality reduce the gains from trade?

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  • Mauro Caselli

Abstract

Panel data on 54 developing countries between 1960 and 2000 are used to investigate how the impact of opening to trade on economic growth is affected by wealth inequality. The results suggest (a) that opening to trade tends to accelerate growth but (b) that the addition to growth depends inversely on the level of wealth inequality prior to opening. These findings confirm the general importance for rapid growth in developing countries of reducing inequalities of opportunity.

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File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/2008-30text.pdf
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Bibliographic Info

Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2008-30.

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Date of creation: 2008
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Handle: RePEc:csa:wpaper:2008-30

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Keywords: growth; inequality; openness; trade; developing countries;

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Cited by:
  1. Caselli, Mauro, 2013. "Credit constraints, inequality and the growth gains from trade," Economics Letters, Elsevier, vol. 121(1), pages 43-47.

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